Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Homeplex Mortgage Investments Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Jay Hoffman
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-1l(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or Item
22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 13, 1995
- --------------------------------------------------------------------------------
The Annual Meeting of Stockholders of Homeplex Mortgage Investments
Corporation, a Maryland corporation (the "Company"), will be held at 8:00 a.m.,
on Tuesday, June 13, 1995, at The Wigwam Resort Hotel, Litchfield Park, Arizona,
for the following purposes:
1. To elect directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified.
2. To ratify the appointment of Kenneth Leventhal & Company as the
independent auditors of the Company for the fiscal year ending
December 31, 1995.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on May 5, 1995 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
To assure your representation at the meeting, however, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she previously has returned a
proxy.
Sincerely,
Jay R. Hoffman
Secretary
Phoenix, Arizona
May 12, 1995
HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
General
The enclosed proxy is solicited on behalf of Homeplex Mortgage
Investments Corporation, a Maryland corporation (the "Company"), by the
Company's board of directors (the "Board of Directors") for use at the Annual
Meeting of Stockholders to be held at 8:00 a.m. on Tuesday, June 13, 1995 (the
"Meeting"), or at any adjournment thereof, for the purposes set forth in this
proxy statement and in the accompanying Notice of Annual Meeting of
Stockholders. The Meeting will be held at The Wigwam Resort Hotel, Litchfield
Park, Arizona.
These proxy solicitation materials were mailed on or about May 12,
1995, to all stockholders entitled to vote at the Meeting.
The Company's principal executive office is located at 5333 North
Seventh Street, Suite 219, Phoenix, Arizona 85014.
The information contained in the "Compensation Committee Report on
Executive Compensation" below and "Performance of the Common Stock" below shall
not be deemed "filed" with the Securities and Exchange Commission or subject to
Regulations 14A or 14C or to the liabilities of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Voting Securities and Voting Rights
Stockholders of record at the close of business on May 5, 1995 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date, there were issued and outstanding 9,716,517 shares of the Company's
Common Stock, $.01 par value (the "Common Stock").
The presence, in person or by proxy, of the holders of a majority of
the total number of shares of Common Stock outstanding constitutes a quorum for
the transaction of business at the Meeting. Each stockholder voting at the
Meeting, either in person or by proxy, may cast one vote per share of Common
Stock held on all matters to be voted on at the Meeting.
The affirmative vote of a majority of the outstanding shares of Common
Stock of the Company present in person or represented by proxy at the Meeting
and entitled to vote on the election of directors is required for the election
of directors. Votes cast by proxy or in person at the Meeting will be tabulated
by the election inspectors appointed for the Meeting and will determine whether
a quorum is present. The election inspectors will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum but as unvoted for purposes of determining the approval of any
matter submitted to the stockholders for a vote. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to vote
on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time before its
use by delivering to the Company written notice of revocation or a duly executed
proxy bearing a later date or by attending the Meeting and voting in person.
Voting Solicitation
The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for expenses incurred in forwarding
solicitation materials to such beneficial owners. Proxies also may be solicited
by certain of the Company's directors and officers, personally or by telephone
or telegram, without additional compensation.
Annual Report
The 1994 Annual Report to Stockholders, which was mailed to
stockholders with or preceding this Proxy Statement, contains financial and
other information about the activities of the Company but is not incorporated
into this Proxy Statement and is not to be considered a part of these proxy
soliciting materials.
Security Ownership of Principal Stockholders and Management
As of the Record Date, there were outstanding 9,716,517 shares of
Common Stock of the Company. The table below sets forth the beneficial ownership
of Common Stock of the Company as of the Record Date by each director and
nominee for director, by each executive officer and by all directors and
executive officers of the Company as a group, and each person known to the
Company to be a beneficial owner of more than five percent of Common Stock which
information as to beneficial ownership is based upon statements furnished to the
Company by such persons.
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned(1) Common Stock(2)
Alan D. Hamberlin* ...................... 274,609(3) 2.71%
Jay R. Hoffman* ......................... 77,029(4) **
Mark A. McKinley* ....................... 46,575(5) **
Mike Marusich* .......................... 34,273(5) **
Gregory K. Norris* ...................... 11,423(5) **
All directors and executive officers
as a group (five persons) .............. 443,909(6) 4.31%
5% Stockholders:
Ira Sochet .............................. 513,400 5.28%
5701 Sunset Drive, Suite 315
South Miami, Florida 33143
The InterGroup Corporation .............. 859,000(7) 8.84%
and John V. Winfield
* Each director and executive officer of the Company may be reached through
the Company at 5333 North Seventh Street, Suite 219, Phoenix, Arizona
85014.
** Less than 1% of the outstanding shares of Common Stock.
(1) Includes, where applicable, shares of Common Stock owned of record by such
person's minor children and spouse and by other related individuals and
entities over whose shares of Common Stock such person has custody, voting
control or the power of disposition.
(2) The percentages shown include the shares of Common Stock actually owned as
of May 5, 1995 and the shares of Common Stock which the person or group
had the right to acquire within 60 days of such date. In calculating the
percentage of ownership, all shares of Common Stock which the identified
person or group had the right to acquire within 60 days of May 5, 1995
upon the exercise of options are deemed to be outstanding for the purpose
of computing the percentage of the shares of Common Stock owned by such
person or group, but are not deemed to be outstanding for the purpose of
computing the percentage of the shares of Common Stock owned by any other
person.
(3) Includes 37,900 shares of Common Stock indirectly beneficially owned by
Mr. Hamberlin through a partnership and 236,709 shares of Common Stock
which Mr. Hamberlin had the right to acquire within 60 days of May 5, 1995
by the exercise of stock options (including dividend equivalent rights).
(4) Includes 15,000 shares of Common Stock owned by Mr. Hoffman and 62,029
shares of Common Stock which Mr. Hoffman had the right to acquire within
60 days of May 5, 1995 by the exercise of stock options (including
dividend equivalent rights).
(5) All of such shares of Common Stock are shares which Mr. McKinley, Mr.
Marusich and Mr. Norris had the right to acquire within 60 days of May 5,
1995 by the exercise of stock options (including dividend equivalent
rights).
(6) Includes 391,009 shares of Common Stock which such persons had the right
to acquire within 60 days of May 5, 1995 by the exercise of stock options
(including dividend equivalent rights).
(7) The nature of beneficial ownership of the 859,000 shares is 459,000 shares
are owned by the InterGroup Corporation and 400,000 shares are owned by
John V. Winfield. Mr. Winfield is Chairman of the Board and President of
The InterGroup Corporation. As of February 7, 1995, 427,406 shares of
InterGroup common stock, constituting 46% of the outstanding InterGroup
shares, were owned directly or beneficially by Mr. Winfield.
Other than options and dividend equivalent rights granted under the
Company's stock option plan, there are no outstanding warrants, options or
rights to purchase any shares of Common Stock of the Company, and no outstanding
securities convertible into Common Stock of the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms received
by it during the fiscal year ended December 31, 1994, and written
representations that no other reports were required, the Company believes that
each person who, at any time during such fiscal year, was a director, officer or
beneficial owner of more than 10% of the Company's Common Stock complied with
all Section 16(a) filing requirements during such fiscal year or prior fiscal
years.
ELECTION OF DIRECTORS
Nominees
A board of four directors is to be elected at the Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for Alan D. Hamberlin, Mike Marusich, Mark A. McKinley and Gregory K. Norris,
all of whom currently are directors of the Company. In the event that any
nominee of the Company is unable or declines to serve as a director at the time
of the Meeting, the proxies will be voted for any nominee designated by the
current Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next annual
meeting of stockholders and until a successor has been elected and qualified.
Biographical information respecting the nominees for directors is set forth
below under the heading "Information Concerning Directors and Executive Officers
of the Company."
The Company's bylaws provide that the Board of Directors shall consist of
not fewer than three nor more than 15 members. The bylaws further provide that,
for so long as the Company maintains its election to be treated as a real estate
investment trust ("REIT"), the majority of the members of the Board of Directors
and of any committee of the Board of Directors will at all times be Unaffiliated
Directors, except in the case of a vacancy. Unaffiliated Directors are directors
who are not themselves, or affiliated with persons, responsible for directing or
performing the day to day business affairs of the Company. As of the date of
this Proxy Statement, the Unaffiliated Directors are Messrs. Marusich, McKinley
and Norris. Vacancies occurring on the Board of Directors among the Unaffiliated
Directors will be filled by nominees selected by the Unaffiliated Directors who
are approved by the vote of a majority of the directors, including a majority of
the Unaffiliated Directors.
All directors are elected at each annual meeting of the Company's
stockholders for a term of one year, and hold office until their successors are
elected and qualified. All officers serve at the discretion of the Board of
Directors.
Information Concerning Directors and Executive Officers of the Company
The directors and executive officers of the Company are as follows:
Name Age Position(s) Held
Alan D. Hamberlin 46 Chairman of the Board of Directors, Director,
President and Chief Executive Officer
Jay R. Hoffman 40 Vice President, Secretary, Treasurer and Chief
Financial and Accounting Officer
Mike Marusich 69 Director
Mark A. McKinley 48 Director
Gregory K. Norris 44 Director
Alan D. Hamberlin has been a Director and the President and Chief
Executive Officer of the Company since its organization and Chairman of the
Board of Directors of the Company since January 1990. Mr. Hamberlin also served
as the President and Chief Executive Officer of the managing general partner of
the Company's former Manager. Mr. Hamberlin has been President of Courtland
Homes, Inc. since July 1983. Mr. Hamberlin has served as a Director of American
Southwest Financial Corporation and American Southwest Finance Co., Inc. since
their organization in September 1982. Mr. Hamberlin also has served as a
Director of American Southwest Affiliated Companies and American Southwest
Holdings, Inc. since their respective organizations in March 1985 and August
1994.
Jay R. Hoffman has been a Vice President and the Secretary, Treasurer and
Chief Financial and Accounting Officer of the Company since July 1988. Mr.
Hoffman, a certified public accountant, engaged in the practice of public
accounting with Kenneth Leventhal & Company from March 1987 through June 1988
and with Arthur Andersen & Co. from June 1976 through March 1987.
Mike Marusich has been a Director of the Company since June 1990. Mr.
Marusich has been a business consultant since 1980. Mr. Marusich, a certified
public accountant for 38 years, engaged in the practice of public accounting
with Ernst & Whinney (now Ernst & Young) for 15 years and was a
partner-in-charge of that firm's Phoenix, Arizona office from 1976 until his
retirement in 1980.
Mark A. McKinley has been a Director of the Company since May 1988. Mr.
McKinley is currently Senior Vice President of NationsBanc Mortgage Corporation.
Prior to that, he was the Co-Founder, President and Director of Cypress
Financial Corporation organized in 1983 and Managing Director of Rancho Santa
Margarita Mortgage Corporation, organized in 1990.
Gregory K. Norris has been a Director of the Company since June 1990. Mr.
Norris has been the President of Norris & Benedict Associates P.C., certified
public accountants, or its predecessor firms since November 1979. Mr. Norris
previously was engaged in the practice of public accounting with Bolan, Vassar
and Borrows, certified public accountants, from December 1978 until November
1979 and with Ernst & Whinney (now Ernst & Young) from July 1974 until December
1978.
On November 1, 1992, the Company entered into an employment agreement with
Alan D. Hamberlin which superseded the previous employment agreement that was to
expire on April 30, 1993. The term of the employment agreement is for the period
from November 1, 1992 through April 30, 1996. The employment agreement provides
for the employment of Mr. Hamberlin as the President and Chief Executive Officer
of the Company and for Mr. Hamberlin to perform such duties and services as are
customary for such a position. The employment agreement provides for Mr.
Hamberlin to receive an annual base salary of $250,000 and an annual performance
bonus in an amount equal to $1,500 for each $.01 per share of taxable income
(computed in accordance with the Internal Revenue Code of 1986, as amended (the
"Code")) distributed to the Company's stockholders with respect to each calendar
year beginning with 1992. A corporation owned by Mr. Hamberlin also is entitled
to the payment of $15,000 annually as reimbursement for expenses incurred by
such company in providing support to Mr. Hamberlin in connection with the
performance of his duties.
The employment agreement provides for Mr. Hamberlin to receive his fixed
and bonus compensation to the date of the termination of his employment by
reason of his death, disability or resignation and for Mr. Hamberlin to receive
his fixed compensation to the date of the termination of his employment by
reason of the termination of his employment for cause as defined in the
agreement. The employment agreement also provides for Mr. Hamberlin to receive
his fixed compensation in a lump sum and bonus payments that would have been
payable through the term of the agreement as if his employment had not been
terminated in the event that Mr. Hamberlin or the Company terminates Mr.
Hamberlin's employment following any "change in control" of the Company as
defined in the agreement. Section 280G of the Code may limit the deductibility
of such payments for federal income tax purposes. A change in control would
include a merger or consolidation of the Company, a sale of all or substantially
all of the assets of the Company, changes in the identity of a majority of the
members of the Board of Directors of the Company or acquisitions of more than
9.8% of the Company's Common Stock subject to certain limitations. The
employment agreement also restricts the Company from entering into a separate
management agreement or arrangement without Mr. Hamberlin's consent.
Meetings and Committees of the Board of Directors
The Company's bylaws authorize the Board of Directors to appoint among its
members an executive committee, an audit committee and other committees composed
of three or more directors. A majority of the members of any committee so
appointed must be Unaffiliated Directors. Messrs. Marusich, McKinley and Norris
are members of the Company's Audit Committee and the Company's Special
Committee. The Audit Committee reviews the annual financial statements, the
significant accounting issues and the scope of the audit with the Company's
independent auditors and is available to discuss with the auditors any other
audit related matters which may arise during the year. The Special Committee was
formed in May 1994 for the purpose of evaluating and negotiating a proposed
merger transaction between American Southwest Holdings, Inc. and the Company. In
February 1995, the Board of Directors of American Southwest Holdings, Inc.
notified the Company that they were ending negotiations with respect to such
merger transaction.
The Board of Directors of the Company held a total of three meetings
during the fiscal year ended December 31, 1994. One director was absent for one
of the three meetings. The Company's Audit Committee met separately at one
formal meeting during the fiscal year ended December 31, 1994. One director was
absent for such Audit Committee meeting. The Special Committee held a total of
eight meetings during the fiscal year ended December 31, 1994. One director was
absent for one of the eight meetings.
Transactions with Management and Others
The Company is a party to a subcontract agreement (the "Subcontract
Agreement") with American Southwest Financial Services, Inc. ("ASFS"), an
affiliate of American Southwest Financial Corporation and American Southwest
Finance Co., Inc. (together "American Southwest"), pursuant to which ASFS has
agreed to perform certain services for the Company in connection with the
issuance and administration of mortgage securities issued by the Company or by
any affiliate of ASFS with respect to which the Company acquires mortgage
interests. Based on reports received by the Company from ASFS, ASFS received
administration fees and expenses of $165,000 for the year ended December 31,
1994 for services performed by ASFS in connection with mortgage securities with
respect to which the Company owns mortgage interests.
The Company is not affiliated with American Southwest or ASFS, except as
described in the following two paragraphs. Except for the Subcontract Agreement
with ASFS, the Company has no agreements with ASFS or American Southwest.
Alan D. Hamberlin directly or indirectly owns a total of 6.7% of the
voting stock of American Southwest Holdings, Inc. American Southwest Holdings,
Inc. directly or indirectly owns 100% of the voting stock of, among other
entities, ASFS, American Southwest Financial Corporation and Westam Mortgage
Financial Corporation.
Alan D. Hamberlin also is a director of American Southwest Financial
Corporation, American Southwest Finance Co., Inc., American Southwest Affiliated
Companies and American Southwest Holdings, Inc.
Executive Compensation
<TABLE>
The following table sets forth compensation received by the Company's
Chief Executive Officer and its other executive officer for the Company's last
three fiscal years ending December 31, 1994.
<CAPTION>
Long-Term
Annual Compensation Compensation
Other
Annual Restricted
Compen- Stock Stock All Other
Name and Principal Position Year Salary Bonus sation Awards Options Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
Alan D. Hamberlin 1994 $250,000 $ 2,100 -- -- 4,642 $ --
Chairman, President and 1993 250,000 4,100 -- -- 5,439 --
Chief Executive Officer 1992 250,000 47,500 -- 25,280 243,861(1)
Jay R. Hoffman, Vice 1994 175,000 15,000 -- -- 1,216 --
President, Secretary, 1993 175,000 -- -- -- 1,425 --
Treasurer and Chief 1992 175,000 -- -- 4,091 12,975(1)
Accounting and Financial
- -----------------
(1) During 1992 the Company purchased 64,818 shares of Common Stock from Mr.
Hamberlin and 9,793 shares of Common Stock from Mr. Hoffman pursuant to
the purchase provisions of the Company's stock option plan. The net value
realized (purchase price of stock on date of purchase by Company less fair
market value on such date) equaled $243,861 for Mr. Hamberlin and $12,975
for Mr. Hoffman. Such shares had originally been purchased in 1991 and
1990 by Mr. Hamberlin and in 1991 by Mr. Hoffman through the exercise of
stock options. At the time Mr. Hamberlin exercised his options to acquire
the 64,818 shares of Common Stock, such shares of Common Stock had a fair
market value in excess of the exercise price paid of $291,422. At the time
Mr. Hoffman exercised his options to acquire the 9,793 shares of Common
Stock, such shares of Common Stock had a fair market value in excess of
the exercise price paid of $57,716. Such amounts were previously disclosed
in the Company's Form 10-Ks for the years ended December 31, 1991 and
December 31, 1990, as applicable. A portion of these amounts, for Federal
income tax purposes, were reported as compensation to Mr. Hamberlin and
Mr. Hoffman in the years the stock options were exercised.
</TABLE>
Officers and key personnel of the Company are eligible to receive stock
options under the Company's stock option plan. See "Employee Benefit Plans."
Director Compensation
The Company pays an annual director's fee to each Unaffiliated Director
equal to $20,000, a fee of $1,000 for each regular meeting of the Board of
Directors attended by each Unaffiliated Director and reimbursement of costs and
expenses for attending such meetings. In addition, the Company's directors are
eligible to participate in the Company's stock option plan. See "Employee
Benefit Plans."
During 1994, the Unaffiliated Directors also accrued dividend equivalent
rights, in the amounts of 913 with respect to Mr. McKinley, 224 with respect to
Mr. Norris, and 672 with respect to Mr. Marusich. The dividend equivalent rights
accrued to Messrs. Hamberlin and Hoffman during 1994 are included in the table
on options granted to the Company's executive officers below. In addition, the
Company's directors are eligible to participate in the Company's stock option
plan described below.
Employee Benefit Plan
Stock Option Plan
In May 1988, the Company's Board of Directors adopted a stock option plan
(the "Plan") which was amended on July 18, 1990 to limit the redemption price
available to optionholders as described below. Under the terms of the Plan, both
qualified incentive stock options ("ISOs"), which are intended to meet the
requirements of Section 422A of the Code, and non-qualified stock options may be
granted. ISOs may be granted to the officers and key personnel of the Company.
Non-qualified stock options may be granted to the Company's directors and key
personnel. The purpose of the Plan is to provide a means of performance-based
compensation in order to attract and retain qualified personnel and to provide
an incentive to others whose job performance affects the Company.
Under the Plan, options to purchase shares of the Company's Common Stock
may be granted to the Company's directors, officers and key personnel. The
maximum number of shares of the Company's Common Stock which may be covered by
options granted under the Plan is limited to 5% of the number of shares
outstanding. An option granted under the Plan may be exercised in full or in
part at any time or from time to time during the term of the option, or provide
for its exercise in stated installments at stated times during the term of the
option. The exercise price for any option granted under the Plan may not be less
than 100% of the fair market value of the shares of Common Stock at the time the
option is granted. The optionholder may pay the exercise price in cash, bank
cashier's check, or by delivery of previously acquired shares of Common Stock of
the Company. No option may be granted under the Plan to any person who, assuming
exercise of all options held by such person, would own directly or indirectly
more than 9.8% of the total outstanding shares of Common Stock of the Company.
An optionholder also will receive at no additional cost "dividend
equivalent rights" to the extent that dividends are declared on the outstanding
shares of Common Stock of the Company on the record dates during the period
between the date an option is granted and the date such option is exercised. The
number of dividend equivalent rights which an optionholder receives on any
dividend declaration date is determined by application of a formula whereby the
number of shares subject to the option is multiplied by the dividend per share
and divided by the fair market value per share (as determined in accordance with
the Plan) to arrive at the total number of dividend equivalent rights to which
the optionholder is entitled.
The dividend equivalent rights earned will be distributed to the
optionholder (or his successor in interest) in the form of shares of the
Company's Common Stock when the option is exercised. Dividend equivalent rights
will be computed both with respect to the number of shares under the option and
with respect to the number of dividend equivalent rights previously earned by
the optionholder (or his successor in interest) and not issued during the period
prior to the dividend record date. Shares of the Company's Common Stock issued
pursuant to the exchange of dividend equivalent rights will not qualify for the
favored tax treatment afforded shares issued upon exercise of an ISO,
notwithstanding the character of the underlying option with respect to which the
dividend equivalent rights were earned. The number of shares issuable upon
exchange of dividend equivalent rights is not subject to the limit of the number
of shares which are issuable upon exercise of options granted under the Plan.
Under the Plan, an exercising optionholder has the right to require the
Company to purchase some or all of the optionholder's shares of the Company's
Common Stock. That redemption right is exercisable by the optionholder only with
respect to shares (including the related dividend equivalent rights) that he has
acquired by exercise of an option under the Plan. Furthermore, the optionholder
can only exercise his redemption rights within six months from the last to
expire of (i) the two year period commencing with the grant date of an option,
(ii) the one year period commencing with the exercise date of an option, or
(iii) any restriction period on the optionholder's transfer of the shares of
Common Stock he acquires through exercise of his option. The price for any
shares repurchased as a result of an optionholder's exercise of his redemption
right is the lesser of the book value of those shares at the time of redemption
or the fair market value of the shares on the date the options were exercised.
The Plan is administered by the Board of Directors which will determine
whether such options will be granted, whether such options will be ISOs or
non-qualified stock options, which directors, officers or key personnel will be
granted options, and the number of options to be granted, subject to the
aggregate maximum amount of shares issuable under the Plan set forth above. Each
option granted must terminate no more than 10 years from the date it is granted.
Under current law, ISOs cannot be granted to directors who are not also
employees of the Company, or to directors or employees of entities unrelated to
the Company.
The Board of Directors may amend the Plan at any time, except that
approval by the Company's stockholders is required for any amendment that
increases the aggregate number of shares of Common Stock that may be issued
pursuant to the Plan, increases the maximum number of shares of Common Stock
that may be issued to any person, changes the class of persons eligible to
receive such options, modifies the period within which the option may be
granted, modifies the period within which the options may be exercised or the
terms upon which options may be exercised, or increases the material benefits
accruing to the participants under the Plan. Unless previously terminated by the
Board of Directors, the Plan will terminate in May 1998.
<TABLE>
<CAPTION>
The following table provides information on options granted to the
Company's executive officers during 1994.
Percentage of
Total Stock
Granted to Exercise Grant Date
Options Employees Price Expiration Market Price
Name Granted(#)(1) in 1994 (per share) Date(3) of Stock Valuation(4)
<S> <C> <C> <C> <C> <C> <C>
Alan D. Hamberlin 4,642 59.67% (2) (2) $1.00 $4,642
Jay R. Hoffman 1,216 15.63 (2) (2) 1.00 1,216
(1) All of such options are currently exercisable.
(2) Represent dividend equivalent rights earned in 1994. Such rights expire at
the same time as the options on which they were earned which expire at
various dates between July 26, 1999 and February 6, 2002.
(3) Options are subject to earlier expiration upon an optionee's termination
for cause or three months after any other termination of employment.
(4) This column represents the Black-Scholes option valuation method
calculation of the options' present value. The Black-Scholes computation
is based upon certain assumptions, including hypothetical stock price
volatility and market interest rate calculations. In addition, the
Black-Scholes valuation method does not reflect the effects upon option
valuation of the options' nontransferability and conditional
exercisability.
</TABLE>
<TABLE>
The following table provides information on options exercised in 1994 by
the Company's executive officers and the value of such officer's unexercised
options at December 31, 1994.
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-The-Money Options at
At December 31, 1994 December 31, 1994($)(1)
Shares Acquired Value At
Name on Exercise (#) Exercise($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Alan D. Hamberlin -- $ -- 236,709 -- $ -- $ --
Jay R. Hoffman -- $ -- 62,029 -- $ -- $ --
(1) Calculated based on the closing price at December 31, 1994 of $1.00
multiplied by the number of applicable shares in the money (including
dividend equivalent rights), less the total exercise price per share.
</TABLE>
SEP-IRA
On June 27, 1991, the Company established a simplified employee
pension-individual retirement account pursuant to Section 408(k) of the Code
(the "SEP-IRA"). Annual contributions may be made by the Company under the
SEP-IRA to employees. Such contributions will be excluded from each employee's
gross income and will not exceed the lesser of 15% of such employee's
compensation or $30,000. The Company did not make any contributions to the
SEP-IRA during 1994.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors is responsible for reviewing and determining the
Company's compensation policies and the compensation paid to executive officers,
including approving the employment agreement with the Company's President. There
is no compensation committee that reviews and makes recommendations to the Board
of Directors on cash compensation, stock option awards and other compensation
for the Company's executive officers.
The principal component of the compensation for the Company's President is
established pursuant to a three-year employment agreement with Mr. Hamberlin.
The term of the employment agreement with respect to Mr. Hamberlin is for the
period from November 1, 1992 through April 30, 1996 and provides for Mr.
Hamberlin to receive an annual base salary of $250,000 and an annual performance
bonus in an amount equal to $1,500 for each $.01 per share of taxable income
(computed in accordance with the Code) distributed to the Company's stockholders
with respect to each calendar year beginning with 1992. With respect to the
calendar year ending December 31, 1994, Mr. Hamberlin received an annual
performance bonus in an amount equal to $2,100 based upon the foregoing
computation. A corporation owned by Mr. Hamberlin also is entitled to the
payment of $15,000 annually as reimbursement for expenses incurred by such
company in providing support to Mr. Hamberlin in connection with the performance
of his duties.
On August 1, 1991, the Company entered into a three-year employment
agreement with Jay R Hoffman, the Vice President, Secretary, Treasurer and Chief
Financial and Accounting Officer of the Company. The employment agreement
provided that Mr. Hoffman receive an annual base salary of $175,000 and, if
determined in the sole discretion of the President of the Company, a bonus. The
employment agreement expired on July 31, 1994 and no new agreement has been
entered into between the Company and Mr. Hoffman. However, the Company has
continued to compensate Mr. Hoffman on the same basis.
In approving the employment agreement for Mr. Hamberlin, the Board of
Directors took into account, among other things, (1) the historical financial
results of the Company, (2) the performance of the Company's Common Stock, (3)
compensation paid to executive officers or to a management company in prior
years, and (4) compensation of executive officers employed by companies in
industries similar to the Company.
The Company also compensates its executive officers through the stock
option plans approved by the stockholders. The Board of Directors believes that
stock option grants provide an incentive that aligns the executive officers'
interests with those of the stockholders by giving them an equity stake in the
business. The Company's stock options are of significant value to the executive
officer receiving such options only to the extent that (i) the price of the
Company's stock increases above the option grant price which is the fair market
value on the date of the grant and/or (ii) dividend distributions on the
Company's Common Stock results in the accrual of dividend equivalent rights with
respect to the stock options. Thus, the Board of Directors believes that the
Company's stock option plan motivates its executive officers to manage the
Company in a manner that will provide the best overall return to the Company's
stockholders.
During fiscal year 1994, the compensation earned by executive officers
pursuant to their respective employment agreements was related to corporate
performance to the extent of cash bonuses which, with respect to Mr. Hamberlin,
was directly related to the amount of taxable income distributed to the
Company's stockholders. In addition, compensation in the form of stock options
held by the Company's executive officers was related to corporate performance
because the value of such stock options depends upon the value of the Company's
Common Stock in the market and the amount of dividend distributions on the
Common Stock (which results in the accrual of dividend equivalent rights with
respect to the stock options). These two methods of compensation reflects the
directors' belief that a portion of the annual compensation of each executive
officer should correlate to the performance of the Company.
Alan D. Hamberlin Mike Marusich Mark A. McKinley Gregory K. Norris
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The entire Board of Directors of the Company performed the function of
determining the Company's compensation policies applicable to its executive
officers. Alan D. Hamberlin, the Chairman of the Board of Directors, also was
the President and Chief Executive Officer of the Company during the fiscal year.
Although Mr. Hamberlin served on the Company's Board of Directors, he did not
participate in the Board of Directors' decisions regarding the approval of his
employment agreement or grants of stock options to him.
PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on
the Company's Common Stock during the five years ended December 31, 1994, with a
cumulative total return on the Standard & Poor's 500 Stock Index and an industry
index (the "Index") prepared by the National Association of Real Estate
Investment Trusts ("NAREIT"). The Index consists of Mortgage Real Estate
Investment Trusts and includes 29 companies with a total market capitalization
of $2.5 billion as compiled by NAREIT. The comparison assumes $100 was invested
on December 31, 1989 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.
HOMEPLEX MORTGAGE INVESTMENTS CORPORATION
1994 PROXY STOCK PERFORMANCE GRAPH
12-31-89 12-31-90 12-31-91 12-31-92 12-31-93 12-31-94
-------- -------- -------- -------- -------- --------
Homeplex
Mortgage
Investments
Corporation 100 160.3 383.5 138.5 72.9 59.5
Mortgage
REIT Index 100 81.6 107.6 109.7 125.6 95.1
S & P 500 100 96.8 126.4 136.1 149.7 151.7
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Kenneth Leventhal & Company,
independent public accountants, to audit the consolidated financial statements
of the Company for the fiscal year ending December 31, 1995 and recommends that
stockholders vote in favor of the ratification of such appointment. In the event
of a negative vote on such ratification, the Board of Directors will reconsider
its selection. The Board of Directors anticipates that representatives of
Kenneth Leventhal & Company will be present at the Meeting, will have the
opportunity to make a statement if they desire, and will be available to respond
to appropriate questions.
DEADLINE FOR RECEIPT OF STOCKHOLDERS PROPOSALS
Stockholder proposals that are intended to be presented by such
stockholders at the annual meeting of the Company for the fiscal year ending
December 31, 1995 must be received by the Company no later than February 1, 1996
in order to be included in the proxy statement and form of proxy relating to
such meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting. If
any other matters properly come before the Meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
Dated: May 12, 1995
<PAGE>
HOMEPLEX MORTGAGE INVESTMENTS CORPORATION
1995 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION, a Maryland corporation, hereby acknowledges receipt of the Notice
of Annual Meeting of Stockholders and Proxy Statement, each dated May 12, 1995,
and hereby appoints Alan D. Hamberlin and Jay R. Hoffman, and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1995 Annual Meeting of Stockholders of HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION, to be held on Tuesday, June 13, 1995, at 8:00 a.m., at The Wigwam
Resort Hotel, Litchfield Park, Arizona, and at any adjournment thereof, and to
vote all shares of Common Stock that the undersigned would be entitled to vote
if then and there personally present, on the matters set forth on the reverse
side.
This proxy will be voted as directed or, if no contrary direction is
indicated, will be voted FOR the election of Directors; FOR the ratification of
the appointment of Kenneth Leventhal & Company as independent auditors of the
Company; and as the Proxies deem advisable on such other matters as may come
before the meeting.
A majority of such attorneys or substitutes as shall be present and
shall act at said meeting or any adjournment or adjournments thereof (or if only
one shall be present and act, then that one) shall have and may exercise all of
the powers of said attorneys-in-fact hereunder.
This Proxy is solicited on behalf of the Board of Directors.
[x] Please mark your votes as this
----------
COMMON
[ ] I plan to attend meeting
1. ELECTION OF DIRECTORS: WITHHOLD AUTHORITY to vote
FOR all nominees listed below for all nominees listed below
(except as indicated)
[ ] [ ]
(If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below):
Alan D. Hamberlin Mike Marusich Mark A. McKinley Gregory K. Norris
2. Proposal to ratify the appointment of Kenneth Leventhal & Company as the
independent auditors of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
And upon such other matters that may properly come before the meeting or any
adjournment thereof.
-----------------------------
DATE
-----------------------------
SIGNATURE
-----------------------------
SIGNATURE
(This Proxy should be dated, signed by the stockholders(s) exactly as his or her
name appears hereon, and returned promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so indicate. If shares are held by joint
tenants or as a community property, both stockholders should sign.)
